A seemingly decisive Supreme Court ruling against gene patents in June left a lot of issues unsettled, and the industry can expect much more litigation on the proper role of patents, biotech experts say.

The decision invalidated patents claimed by Myriad Genetics against rival Ambry Genetics on the use of naturally occurring DNA sequences in tests for the risk of breast cancer. Yet on July 9, Myriad filed another lawsuit against Ambry, as well as another competitor, Gene by Gene, citing other patents it claims Ambry violated.

On July 2, the public interest nonprofit Consumer Watchdog sued to invalidate a patent on making human embryonic stem cells, citing the June 13 Supreme Court decision as precedent. Like genes, embryonic stem cells are a product of nature and thus aren’t subject to patent protection, Consumer Watchdog argued.

Few in biotech oppose the use of patents to control the use of true inventions. But because biotech is founded on manipulation of natural life processes, it can be hard to draw a clear dividing line between inventions and something that exists in nature.

In the beginning, biotech created drugs by splicing natural human genes into bacteria. The bacteria then produce whatever the gene makes in humans. These recombinant drugs include human insulin, sold by Eli Lilly as Humulin. The Humulin patent, since expired, was based on its method of manufacture, not the gene sequence.

In those early days of biotech, claiming a patent on human insulin was equated with patenting aspirin, said Lisa Haile, a biotech intellectual property attorney not involved in the Myriad litigation. So patents were based on the recombinant manufacturing process, which then was still new, Haile said.

With the advance of biotech over the decades, recombinant manufacturing in bacteria has become standard, said Haile, with the San Diego office of DLA Piper. Once these methods become common knowledge, they don't suffice for patent protection. So those making patented biotech drugs have developed improved manufacturing methods that are patentable.

Moreover, biotech has produced superior versions of human insulin, Haile said. These versions can be patented. For example, slightly altered forms of insulin can be made longer lasting, which makes it more convenient to take.

“It’s a better product, basically,” Haile said.

In the Myriad case, the court ruled that the Utah-based company cannot patent DNA sequences that occur in nature. Myriad had used those sequences in tests for mutations in two genes, called BRCA1 and BRCA2.

However, the court upheld Myriad’s patents on so-called “complementary DNA” that contains genetic instructions for making proteins. Complementary DNA does not exist in nature, and thus is eligible for patenting, the court ruled.

Cultural shift

The Myriad case marks the beginning of a cultural shift in how biotech patents are viewed, to take into account public needs, said University of Michigan researcher Shobita Parthasarathy. But other decisions, and a change of attitude from the U.S. Patent and Trademark Office, will be needed to confirm that shift.

“What’s great about it is that it explicitly puts the public interest back into the patent system,” said Parthasarathy, an associate professor at the university’s Ford School of Public Policy. “If you look at the decision itself, it’s not a clear win. ... There’s still a lot of DNA that’s patented with the breast cancer genes. And so we don’t yet know whether those patent claims are going to be upheld.”

Other questions include how far afield from the BRCA genes the decision will apply, and whether courts will enforce higher standards for gene-related patents than before, Parthasarathy said.

“Certainly, Myriad has been quite aggressive in enforcing all the patent claims that it still has left,” she said. “All the Supreme Court did was throw out claims based on simple isolation of the DNA sequence.”

Haile said she thinks Myriad’s claims won’t hold up.

Haile says she’s told her biotech clients to protect synthetic DNA sequences with copyrights instead of patents. While patents apply to inventions, copyrights cover original works. While often thought of as applying to literary and musical works, copyright in modern times also has been applied to software. And DNA has often been compared with software.

Copyrights are far cheaper and faster to get than patents. It can take years and many thousands of dollars in attorney’s fees to get a patent. Copyrights are automatic, although they must be registered to be defended legally. Fees run from $35 to $220.

Moreover, copyrights are just as enforceable under the law, as file-sharing companies like Napster have discovered.

“I saw the analogy between engineered DNA sequences and software code and wanted to try the copyright approach for DNA, but no clients would agree to let me try,” Haile said.

Stem cell challenge

The human embryonic stem cell patent challenge opened up many more potential fronts for biotech patent litigation, Haile said. If the gene patent decision is carried over to other parts of the biotech industry, companies producing some antibodies and other biotech products might find their patents at risk.

That challenge was filed against the Wisconsin Alumni Research Foundation. The foundation claimed the patent for a 1998 discovery by a University of Wisconsin-Madison researcher. The researcher found how to isolate and grow human embryonic stem cells.

WARF insisted that scientists producing human embryonic stem cells should pay royalties. But challengers said the discovery does not merit patent protection, because it was an application of existing technology.

On April 29, before the Myriad decision, the Patent and Trade Office rejected the WARF patent, one of three it claims on embryonic stem cells. Although two of those patents had been affirmed and could not be appealed, Consumer Watchdog says the office’s Board of Appeals had opened the door to appealing those patents as well.

San Diego-based ViaCyte, which is developing a diabetes treatment from embryonic stem cells, said it’s not worried about the WARF patents. By the time ViaCyte’s treatment is ready for sale, the patents will have expired, said Paul Laikind, ViaCyte’s chief executive. The patents expire in 2015.

The device is projected to begin human clinical trials next year, funded in part by the California Institute for Regenerative Medicine, the state’s stem cell agency.

ViaCyte is protected for now against a potential WARF lawsuit by a “safe harbor” exception that applies to research, Laikind said. “In the case of the WARF patents, even if we did infringe, which I don’t think we do, those patents’ expiration is probably significantly sooner than when we would be on the market.”

However, UC San Diego stem cell scientist Gene Yeo said he’s worried about how the WARF patents will affect commercialization of embryonic stem cell research. Some of the research has been performed on stem cell lines produced by WARF; Yeo said pharmaceutical companies aren’t interested in commercializing that research.

Parthasarathy said that anything that discourages even a portion of researchers ultimately hurts the quality of science as a whole.

“In an environment of uncertainty, competing patent claims, fear that you’re going to be sued, that is something that scares researchers away,” Parthasarathy said. “Good scientific work and good innovation often happen when you have multiple minds, fighting it out, trying to find the best way to solve a problem.”

“In the breast cancer case, all of the geneticists in breast cancer know about this case, so they may be more likely to be scared off,” she said. “And it also depends on the reputation of the patent holder as to whether it’s willing to litigate. Myriad Genetics is well known as happy to litigate.”